While the CIS producers' billet offers for the export markets have been at the price level of $660-670/mt FOB in the week ending February 15, it is heard that the latest deals concluded to the Middle East and Persian Gulf are at $660-665/mt FOB. The Black Sea billet market, which had been maintaining its strength in past weeks but has lately stabilized, may gain momentum again following the latest deals. Some of the CIS producers have already stopped offering at the price level of $660/mt FOB. The target price level for the producers in question looks to be $670/mt FOB and above.
In the local Turkish billet market, the EAF price levels have this week been in the range of $680-700/mt ex-works, excluding VAT. On the other hand, Isdemir has opened its billet sales to the local market as of February 15, 2008 at the price level of $700/mt ex-works, excluding VAT. Rebar rolling mills which are mostly producing for the local market are uneasy with the current billet prices due to the fact that there is not enough margin in the local market and so they are unwilling to make purchases in large amounts. Merchant bar rolling mills, despite the fact that they are feeling uncomfortable with current prices, have been concluding some purchases (but not for large tonnages) at the price levels in question since their margins in the export and local markets are slightly better compared to those of the rebar rolling mills.
Turkish mills have been offering billets to the export market at the price level of $700-710/mt FOB for April shipments. It is heard that some mills have filled their order books and have started to wait for May shipments. Furthermore, it is being observed that although the mills' offers have been above $700/mt FOB generally, the mills are likely to be open to firm bids at levels approaching $700/mt due to the effect of the latest scrap deals.
The Italian billet market has also started to follow the global billet trend. Billet in the local Italian market has this week been at €480-490/mt ($703-718/mt) delivered to rolling mill in northern Italy, on 60-day open account basis, excluding VAT. It is rumored that there have been offers in the market at price levels of up to €500/mt ($733/mt); however, this has not yet been confirmed. On the import side, despite some demand from rolling mills, the offers from the CIS at price levels of above $700/mt CFR are still too high for the Italian domestic market. The recent firm bids from rolling mills have mainly been in the range of $690-695/mt CFR. However, the Italian rolling mills may be active in the upcoming weeks if the local Italian market manages to stay on its upward trend.
Prices in the billet markets have been strong but stable throughout February. However, it is being observed that the expectations of market players are again in favor of a price increase trend. The positive renewal of the Far East market following the Chinese Lunar Year holiday provides support for the overall billet market.